Finalnub

hasnain0099 Wrote:
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> its not that difficult trust me
> look keep the point in mind that
> ST is per period cost of borrowing devided by net
> proceeds
>
> Bank loan for 2 months
>
> Net expense= Interest for 2 months + any
> commitment fee for two months
> Net proceeds= Loan amount (as you will be awarded
> full amount)
>
> Banker's acceptence
>
> Expense= discount for two months
> Net proceeds= Amount-discount (what you get
> initially)
>
> commercial notes
>
> expense: (discount+dealer's commision+backup
> commision) for two months
> Net proceeds= Amount-discount (what you get
> initially)
>
> its not that difficult i guess
>
> and yes
> do remember Inverse floater's return
> Payoff=L-R(rate) (correct me if i am wrong)


where did you get these formulas from? i dont remember Schweser teaching me formulas for short term borrowing..? Just showed me what the different forms of short term borrowing were.